Sri Lanka fully legalizes gambling in tourism drive

COLOMBO (Reuters) - Sri Lanka's parliament passed a law on Wednesday to fully legalize gambling despite opposition and religious protests, part of a government plan to revive its tourism industry after the end of a three-decade civil war.

President Mahinda Rajapaksa has embarked on a reform programme aiming to grow the $42-billion economy by exploiting his country's strategic position in the Indian Ocean.

One of the more ambitious goals is a targeted $2 billion in tourism revenue a year by 2016. Sri Lanka earned $350 million in 2009, and $391.8 million by October this year.

Gambling is not totally prohibited and there are small casinos and sports-betting parlors in Colombo, but they operate under a hazy regulatory framework that has not encouraged large-scale investment nor robust revenue collection.

"This will enable the government to streamline all casinos, which are now being monitored under various state institutions," junior finance minister Sarath Amunugama told parliament before the bill was passed.

Gaming industry investors are already jostling for position over a proposed $500-million tourism zone in Colombo's Beira Lake area, to be anchored by a $100-million hotel-casino complex.

The government's change to the law prompted some opposition, but with a two-thirds parliamentary majority, it fizzled. Opposition legislator Ravi Karunanayake said the government had gone ahead despite protests from the influential Buddhist clergy.

The majority of Sri Lanka's 21 million people are Buddhist, and there are Hindu, Muslim and Christian minorities. Despite some recent signs of conservatism, the country's modern history has generally been culturally moderate.
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